Question of the Day

Whose side of the story do you believe?

Brazil’s discoveries of what may be two of the world’s three biggest oil finds in the past 30 years could help end the West’s reliance on Middle East crude, according to an influential consultant’s report.

Saudi Arabia’s influence as the biggest oil exporter would wane if the fields are as big as advertised, and China and India would become dominant buyers of Persian Gulf oil, said Peter Zeihan, vice president of analysis at Strategic Forecasting Inc. in Austin, Texas.

Mr. Zeihan’s firm, which consults for companies and governments around the world, was described in a 2001 Barron’s article as “the shadow CIA.”

Brazil could be pumping “several million” barrels of crude daily by 2020, vaulting the nation into the ranks of the world’s seven biggest producers, Mr. Zeihan said. The U.S. Navy’s presence in the Persian Gulf and adjacent waters would be reduced, leaving the region exposed to more conflict, he said.

“We could see that world becoming a very violent one,” said Mr. Zeihan, who once was chief of Middle East and East Asia analysis for Strategic Forecasting. “If the United States isn’t getting any crude from the Gulf, what benefit does it have in policing the Gulf anymore? All of the geopolitical flux that racks that region regularly suddenly isn’t our problem.”

Brazil’s state-controlled Petroleo Brasileiro SA in November said the offshore Tupi field may hold 8 billion barrels of recoverable crude. Among discoveries in the past 30 years, only the 15 billion-barrel Kashagan field in Kazakhstan is larger.

Haroldo Lima, director of Brazil’s oil agency, last week said another subsea field, Carioca, may have 33 billion barrels of oil. That would be the third-biggest field in history, behind only the Ghawar field in Saudi Arabia and Burgan in Kuwait.

Analysts Mark Flannery of Credit Suisse Group and Gustavo Gattass of UBS AG challenge the estimate for Carioca. Mr. Lima, the Brazilian oil agency director, later attributed the figure to a magazine.

Mr. Flannery told clients during an April 16 conference call that 600 million barrels is a “reasonable” estimate and suggested Mr. Lima may have been referring to the entire geologic formation to which Carioca belongs.

Carioca is one of seven fields identified so far in the BM-S-9 exploration area, part of a formation called Sugar Loaf.

If additional drilling by Petrobras, as Petroleo Brasileiro is known, confirms the Tupi and Carioca estimates, the fields together would contain enough oil to supply every refinery on the U.S. Gulf Coast for 15 years. Petrobras said it needs at least three months to determine how much crude Carioca may hold.

Mr. Zeihan said that beyond supply gains from Brazil, it will take a tripling of Canadian oil-sands output and greater fuel efficiency to end Western reliance on Middle East oil.

The United States imports about 10 million barrels of oil a day, or 66 percent of its needs, according to the U.S. Department of Energy. Saudi Arabia was the second-largest supplier in January, behind Canada.